UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

	For the quarterly period ended March 31, 2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from to

Commission File Number: 001-34211

GRAND CANYON EDUCATION, INC.

(Exact name of registrant as specified in its charter)


Delaware		20-3356009
(State or other jurisdiction of Incorporation or organization)		(I.R.S. Employer Identification No.)

2600 W. Camelback Road

Phoenix, Arizona 85017

(Address, including zip code, of principal executive offices)

(602) 247-4400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	LOPE	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:


Large Accelerated Filer ☒		Accelerated Filer ☐
Non-accelerated Filer ☐		Smaller Reporting Company ☐
		Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The total number of shares of common stock outstanding as of May 2, 2022, was 32,319,350.

Table of Contents

GRAND CANYON EDUCATION, INC.

FORM 10-Q

INDEX


	Page
PART I – FINANCIAL INFORMATION	3

Item 1 Financial Statements	3
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3 Quantitative and Qualitative Disclosures About Market Risk	29
Item 4 Controls and Procedures	30

PART II – OTHER INFORMATION	30

Item 1 Legal Proceedings	30
Item 1A Risk Factors	30
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3 Defaults Upon Senior Securities	31
Item 4 Mine Safety Disclosures	31
Item 5 Other Information	31
Item 6 Exhibits	31
SIGNATURES	33

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1.Financial Statements

GRAND CANYON EDUCATION, INC.

Consolidated Income Statements

(Unaudited)


	Three Months Ended
	March 31,
(In thousands, except per share data)	2022		2021
Service revenue	$	244,133	$	236,934
Costs and expenses:
Technology and academic services		36,306		32,051
Counseling services and support		67,513		61,239
Marketing and communication		50,851		47,731
General and administrative		9,893		9,582
Amortization of intangible assets		2,105		2,105
Total costs and expenses		166,668		152,708
Operating income		77,465		84,226
Interest income on Secured Note		—		14,549
Interest expense		—		(799)
Investment interest and other		205		121
Income before income taxes		77,670		98,097
Income tax expense		19,592		19,985
Net income	$	58,078	$	78,112
Earnings per share:
Basic income per share	$	1.67	$	1.70
Diluted income per share	$	1.66	$	1.69
Basic weighted average shares outstanding		34,806		46,084
Diluted weighted average shares outstanding		34,901		46,300

The accompanying notes are an integral part of these consolidated financial statements.

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GRAND CANYON EDUCATION, INC.

Consolidated Balance Sheets


	March 31,		December 31,
(In thousands, except par value)	2022		2021
	(Unaudited)
ASSETS:
Current assets
Cash and cash equivalents	$	201,933	$	600,941
Investments		62,396		—
Accounts receivable, net		102,006		70,063
Income tax receivable		—		1,275
Other current assets		14,020		8,766
Total current assets		380,355		681,045
Property and equipment, net		136,677		136,120
Right-of-use assets		55,672		57,652
Amortizable intangible assets, net		183,114		185,219
Goodwill		160,766		160,766
Other assets		1,802		1,943
Total assets	$	918,386	$	1,222,745
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Current liabilities
Accounts payable	$	29,638	$	24,306
Accrued compensation and benefits		31,986		32,714
Accrued liabilities		30,705		27,593
Income taxes payable		20,694		5,895
Deferred revenue		12,172		10
Current portion of lease liability		7,514		7,426
Total current liabilities		132,709		97,944
Deferred income taxes, noncurrent		27,344		25,962
Other long-term liability		30		37
Lease liability, less current portion		51,866		53,755
Total liabilities		211,949		177,698
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.01 par value, 10,000 shares authorized; 0 shares issued and outstanding at March 31, 2022 and December 31, 2021		—		—
Common stock, $0.01 par value, 100,000 shares authorized; 53,826 and 53,637 shares issued and 33,278 and 37,722 shares outstanding at March 31, 2022 and December 31, 2021, respectively		538		536
Treasury stock, at cost, 20,548 and 15,915 shares of common stock at March 31, 2022 and December 31, 2021, respectively		(1,506,766)		(1,107,211)
Additional paid-in capital		299,858		296,670
Accumulated other comprehensive loss		(323)		—
Retained earnings		1,913,130		1,855,052
Total stockholders’ equity		706,437		1,045,047
Total liabilities and stockholders’ equity	$	918,386	$	1,222,745

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

GRAND CANYON EDUCATION, INC.

Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended
	March 31,
(In thousands)	2022		2021
Net income	$	58,078	$	78,112
Other comprehensive income, net of tax:
Unrealized losses on available-for-sale securities, net of taxes of $99 and $35 for the three months ended March 31, 2022 and 2021, respectively		(323)		(120)
Comprehensive income	$	57,755	$	77,992

The accompanying notes are an integral part of these consolidated financial statements.

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GRAND CANYON EDUCATION, INC.

Consolidated Statement of Stockholders’ Equity

(In thousands)

(Unaudited)


	Three Months Ended March 31, 2022
									Accumulated
							Additional		Other
	Common Stock			Treasury Stock			Paid-in		Comprehensive		Retained
	Shares	Par Value		Shares	Cost		Capital		Loss		Earnings		Total
Balance at December 31, 2021	53,637	$	536	15,915	$	(1,107,211)	$	296,670	$	—	$	1,855,052	$	1,045,047
Comprehensive income	—		—	—		—		—		(323)		58,078		57,755
Common stock purchased for treasury	—		—	4,575		(394,930)		—		—		—		(394,930)
Restricted shares forfeited	—		—	6		—		—		—		—		—
Share-based compensation	189		2	52		(4,625)		3,188		—		—		(1,435)
Balance at March 31, 2022	53,826	$	538	20,548	$	(1,506,766)	$	299,858	$	(323)	$	1,913,130	$	706,437

Three Months Ended March 31, 2021

Accumulated

Additional

Other

Common Stock

Treasury Stock

Paid-in

Comprehensive

SEC Form 10-Q filed by Grand Canyon Education Inc.